Ruling party MP threatens to sue state ports company

Ruling party MP threatens to sue state ports company
October 12 16:03 2016

MP Riyaz Rasheed has threatened to sue the state-owned Maldives Ports Limited after its CEO Mohamed Junaidh told the press today that a company linked to the ruling party lawmaker billed extra for fuel supplies.

MPL CEO Mohamed Junaidh told the press this morning that Meridiam Services had been billing for 160,000 litres a month despite MPL’s vehicles needing only 60,000 litres, resulting in a loss of MVR1.2 million (US$78,000) every month.

“Things have happened here whether some people believe it or not. The fuel lorry comes in here at midnight. It comes and goes regardless of whether fuel is refilled,” he said, implying that MPL was defrauded.

But Riyaz, the deputy leader of the Progressive Party of Maldives’ parliamentary group, dismissed the claims as “lies” in a tweet this afternoon. “Meridiam will sue MPL!” he warned.

Meridiam will also sue media outlets that covered the MPL press conference, he said.

The MPL called the press conference after the civil court issued a temporary order compelling it to buy diesel exclusively from Meridiam Services.

The order was granted pending a judgment in Meridiam’s lawsuit against MPL, which was filed over alleged breach of contract after the state-owned ports company began buying diesel from other suppliers.

Junaidh said the agreement does not prohibit MPL from buying diesel from third parties.

The MPL will contest the order at the high court today, he said, declaring that the company will not buy fuel from Meridiam under his leadership.

Meridiam said in its lawsuit that it won a competitive bid to supply fuel to MPL. But Junaid explained that the bid was won in April 2015 and the agreement was renewed a year later without bidding.

While the agreement with Meridiam stipulates that prices must be lowered in line with global oil price changes, Junaidh said the company continued to supply diesel at MVR12 per litre, which was higher than the current market rate.

“When we got prices today after an announcement we made, the lowest was MVR6.90 per litre,” he said.

Several MPL vehicles have also been damaged and out of commission, he continued, but the amount of oil supplied did not decline.

Fuel lorries will now have to fill in a tanker set up at the MPL site. “A bowser has also been bought. It will be used to refuel the vehicles here,” he said.

He added that the MPL now saves MVR1.2 million a month.

Asked about the ruling party MPs’ connection to Meridiam, Junaidh said he did not know the company’s shareholders, insisting that the decision to seek other suppliers was not politically motivated.

President Abdulla Yameen would not accept a state-owned company facing such a huge loss, he said.

According to the opposition-aligned Raajje TV, MP Riyaz Rasheed has transferred his majority shares in Meridiam to two of his children.

The fuel supplier was reportedly under investigation by the anti-corruption watchdog in February over a deal with the state-owned Fenaka Corporation.

Meridiam is also locked in litigation with the state wholesaler. Last week, the State Trading Organisation appealed a civil court ruling in favour of Meridiam to recover MVR19.3 million (US$1.2 million) released as a credit facility.

The STO claims that Meridiam failed to pay for fuel released on credit from March to December 2010 along with fines imposed for non-payment. But the civil court ruled in June that STO was unable to produce original documents to prove that the fuel was ever released to Meridiam.

The appeal is ongoing at the high court.